An Ante Nuptial Contract (ANC), also commonly known as a Prenuptial Contract or Prenup, is an agreement entered into by two people prior to their marriage. This contract regulates the terms and conditions relating to the exclusion of property between the spouses. An ANC ranks as one of the most important legal documents one may sign in his or her lifetime. This is because it governs what happens to your assets and liabilities in the case of divorce or death. Many people don’t understand the severe and costly implications that the absence of an ANC can have.
When a marriage is entered into where no ANC has been concluded, the marriage will automatically be in community of property. What this entails is that the assets and liabilities of each spouse fall into a joint estate. Whether or not such property was acquired prior to or after the marriage is irrelevant as each spouse has an equal claim to this property. This matrimonial property regime is extremely risky as it is possible that the entire estate could be attached by creditors, leaving the couple with nothing in their wake.
Most legal experts would recommend entering into a marriage out of community of property, and this is where an ANC is typically concluded. There are two types of marriage systems which can be concluded out of community of property: One which includes the accrual system and one which excludes the accrual system.
Inclusion of the accrual system allows each spouse to maintain a separate estate during the subsistence of the marriage and it prevents the sharing of profits and losses. However, in the event of dissolution of the marriage, they will be entitled to share whatever was acquired during the marriage. On the other hand, excluding the accrual system achieves a complete separation of the assets of the spouses. There is no sharing upon dissolution of the marriage and each spouse retains what belonged to him or her prior to and during the marriage.
Deciding whether or not to enter into an Ante Nuptial Contract and which system to follow is not an easy decision. Our attorneys have the expert knowledge to advise you accordingly.
